Wiggs’ way

By Lance Wiggs, November 18, 2009 @ 1:37 pm

Let Lance Wiggs help with your tricky business problems. Email him at advice@idealog.co.nz

Once were lenders

We used to get on brilliantly with our bank manager. We’re a growing company, and the bank was always willing to back us up. But when the recession struck the bank decided it wasn’t in the business of lending.

Fair enough, but now we think we’ve weathered the worst of the recession and don’t want to miss opportunities—and our bank just doesn’t want to know. It’s frustrating, as we’re a successful, solvent and sensible company. We’re not looking for an investor and we’re not after lots of credit, but clearly Kiwi banks are still spooked. Is anybody lending to businesses these days?
Frustrated of Birkenhead

Dear Frustrated,
Banks exist to lend you money when you don’t need it, so it’s pleasing to hear you managed to get some when you were growing. However, those heady days are over, and we’re back to the basics of banking—lending money when you don’t need it, and taking your money away when you do.

You should really consider getting equity partners with deeper pockets. If you are growing in these tough times then you are a good hedge against other assets, which seem to be heading backwards, and you could get a good valuation. It’s better to have a large share in a huge company than 100 percent of a small one.

If you are determined to keep your share, then fund organically. Take a hard look at your numbers: are you as lean as you can be? Do you have a genuine low-cost culture? Is your inventory really in control? Can you change supplier terms or how you sell? Do your numbers and work out your maximum self-funded rate of growth. It should still be pretty good, and in these times pretty good is very good.

But if equity and self-funding don’t do it, then you need to work on your banker. Show her a solid and sharply presented business plan, build a strong board and give her comfort that you’re a lot safer than houses. If that fails, then shop around—and let her know. Bank with the outfit that gives you the best deal. If all else fails, then consider adopting a rustic rural look.

Ideas are not equal

I’m in an unusual situation. I was in finance for 12 years, managing sales and service teams at operational and strategic level. But recently I took redundancy and I’ve never felt better.

Now, someone who has followed my career has offered a significant amount of money to start my own business. Great—but what will I do? Most people have an idea they’d do if they had the funds, but not me. My strength is managing teams of people to sell a product or a service. I know that if I believe in a product, I will make it fly through hard work and sheer determination.

I’ve considered a whole bunch of things, from selling used tyres to Kenya for their ovens (great for the environment, but the economy in Kenya isn’t strong enough to pay) to services for the elderly (an incredibly growing market, but I’m not certain how to make it profitable and I’m not keen on cutting toenails) to something around the emissions problem (cow flatulence?).
Changing Gears

Dear Changing Gears,
So you have money, and you can sell. Congratulations: you have two of the essential elements you require to start a business. But you need more—an idea, a dream, a product.

You don’t have to invent the idea yourself; there are plenty out there. But people with ideas are often lacking in two factors: ability to sell, and deep pockets. So get out there. Start with who you know, then make new connections. With your experience, it should be easier for you than most, but take your time. Understand what value you bring to the business and how you like to work with others. A series of coffee conversations will get you ever closer to the ideal person with the idea, who thinks you’re just the sales person with deep pockets she’s looking for.

I hope you like coffee.

Back to the cave

I’m hip with this social media stuff, and I know happy workers are productive workers, but I don’t know where to draw the line on people goofing off on Facebook, Trade Me, Twitter and so on. My wife says I should ban the sites, but that seems a bit cavemanesque to me. Where’s the compromise?
Hipster

Dear Hipster,
I’m glad that you are groovy with the latest in online jive, and your concerns are shared by many an aging corporate leader. But these kids these days—they’re so unfocused. So why not extend the hard line of your wife, and turn off access to the Internet? While you are at it, go ahead and ban cellphones and cameras. Employees will resist at first, and while it may make it hard to contact customers, all will be surprised at just how easy it is to focus on the work at hand.

Of course, you really should know what they are saying about you on The Twitter. You’ll also struggle to attract and retain employees who actually want a life. We all like to see people working, and one of the best ways to do so is to let them live their life while they are at work. It’s a little counter-intuitive, but the more of their life they can live at work, the more of their life they spend at work and, well isn’t that a good thing?

Of course, you still have the problem of those who enjoy Facebook and yet fail to actually complete any work. There really is only one answer: treat people like adults. Ask for results, but allow flexibility in delivery. If that means doing 14 things at once, fine, as long as they do the three things you asked them to do. Harness their energy and attention using basic tools like simple monthly priorities and workplans. Hold people to account for performance against agreed priorities and make those priorities meaningful and achievable. After all, if we enjoy our work, then we’re not really working, are we?

And next time you have a question about social media, Internet access and the like, head straight past your marketers, avoid your wife (if you can) and pop in to the cupboard where you stashed the IT department. Look for the youngest, nerdiest, most emo person there and just do what they tell you. Seriously.

Comments

Michael

November 18, 2009 @ 2:36 pm

Back to the Cave
By all means bypass your marketers, they are not really marketers, just sales people with a fancy titles, think I would also bypass the IT department, they exist to keep the system running, protect the integrity of the data.

Because they can turn a computer on does not mean they know anything about the Web Internet or Social Media.

Welcome to the current business infrastucture and culture in NZ

The answer: go forward using the tools of the Internet Age and your business will be future proofing itself

Dominic

November 22, 2009 @ 11:19 am

I agree mostly with Wiggs Back to Cave response, except for consulting IT geeks part.
However, I do strongly agree with building a strong culture of Fairness, Return on Investment and Fun.
Fairness - as an employer I treat you as an adult if you behave like one. If you act like a spoilt kid, well, get ready for time-out.
Return on Investment - as an employer, the main reason i bother paying you is ito get a positive return on your time & expertise. If not, we will change the ratio, either you get less pay, or we get someone who is worth it.
Fun - with above stern promises in place, everyone smile, we only have one life, and work has to be a win/win. As an employer I am not solely responsible for people enjoying their role, they make a decision to or not.
In summary, I adopt this simple approach, we have fun, and non performers are encouraged to either pick it up or move on, all in an fair, sensible, adult kind of way.
It probably helps that I twitter, facebook, and blog a bit as well, so I understand the pros & cons.

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